When Evaluating the Effectiveness of a Client's Internal Controls with a Tolerable

question 4

Multiple Choice

When evaluating the effectiveness of a client's internal controls with a tolerable rate of deviation of 5 percent,the audit team determined the upper limit rate of deviation to be 4 percent.Based on this information,which of the following decisions would the audit team most likely make?

• A)Reduce the planned degree of reliance on internal controls.
• B)Increase the extent of further audit procedures.
• C)Rely on internal controls as planned.
• D)Expand the sample to examine additional applications of the control.

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Definitions:

Threshold of Excitation

The minimum level of stimulus intensity required to activate a neuron and generate an action potential.

Electric Current

The flow of electric charge through a conductor.

Absolute Refractory

A period immediately following the transmission of an impulse in nerve or muscle in which a neuron or muscle cell cannot respond to any additional stimulus.

Period

Often refers to a length or span of time in a sequence of events or a specified interval in processes or phenomena.